Bank Secured Credit Cards


Bank Secured Credit Cards

Although there are many types of credit cards out there for consumers, there are several types of bad credit cards. Those who are looking to improve their credit have several options available, one of which is a credit card guaranteed by the bank. This credit card can help you improve your credit, because it works together with your savings or checking account.
Bank Secured Credit Cards
Bank Secured Credit Cards

Bank guaranteed credit cards look and function like traditional credit cards, even though they use your bank account as collateral. Whenever you cannot pay your credit card bills when they are due, the bank will take money from your account. In this way, there is always money there for the bank, if you cannot make payments.

A bank-guaranteed credit card is also ideal for those who have experienced bankruptcy or are not eligible for credit lines because of bad credit or no credit history. This credit card shows your bank that you can pay your monthly fees, and that you are taking the necessary steps in rebuilding or building your credit. Over time, if you remain responsible and pay your bills on time, your bank can provide you with an unsecured line of credit - known as a standard, unsecured credit card.

Due to the fact that a bank-guaranteed credit card only allows you to spend what is in your account, you don't need to worry about debt. When you can't make a payment, the bank only takes money from your account. Even though this is a good backup plan, you should always pay the bills and don't let this happen.

Just like other credit cards, bank-guaranteed credit cards have flaws that can hit you like many bricks if you use the card irresponsibly. Whenever you don't pay your bills on time, the bank can hit you with high interest fees and late fees. These bills and fees can become higher and higher if you don't start paying your bills, which can eventually cause you to drain the account you set aside. However, if you pay your bills on time, you don't need to worry about these types of fees.

For those who have bad credit or need to start building credit, a bank-guaranteed credit card is a good place to start. These cards can direct you to an unsecured credit card, provided you pay your bills on time. Almost all banks offer this credit card, all you have to do is ask. After your credit card is in good condition for a certain period of time - you will be satisfied knowing that you took the right steps in rebuilding your credit.